Friday, July 29, 2011

Barkley Rosser on the Idiocy of the Debt Ceiling and Moody's Opposition to It

He writes:

"This actually dates back to July 18, but has somehow gotten nearly zero coverage in the MSM, somewhat like Bill Clinton's argument that the debt ceiling is unconstitutional, something that Obama's press secretary seemed to move him away from agreeing with this past Monday. In any case, one link to the declaration by Moody's that the US should abolish the debt ceiling is at http://economicsnewspaper.com/policy/german/moodys-u-s-should-abolish-debt-limit-47142.html. That Moody's has threatened to downgrade the US credit rating has received a lot of attention, but this piece of their threat has somehow been completely ignored, and so far there are exactly zero members of Congress of either party who have even remotely suggested that we do what Moody's suggests, which is clearly what needs to be done.

I remind everyone again: no other nation in world history has ever had such a ridiculous thing as a nominal debt ceiling. Whether or not it is unconstitutional, it is utterly incoherent. It forces the president to break the law if Congress neither raises the ceiling nor prescribes which bills are to be paid on time (if at all). I find it bizarre that all sorts of people are loudly declaring how the president has no authority raise the debt ceiling but somehow has the authority to "prioritize" which bills will be paid and which will not, meaning that somehow it is his responsibility rather than Congress's to actually destroy the "full faith and credit of the United States" that is demanded by the Constitution. Again, not paying legally mandated bills is a default, not just a failure to pay interest on securities on time
."

The bolded point is precisely the one I made, which Brad DeLong shared here. I had written: "I personally don't see why we have to make this complicated as even a 14th amendment issue. Obama has conflicting legislation: he is told what revenue to raise, he is told what money to spend, and he is told what debt to issue. Congress can't legislate arithmetic - Obama HAS to break one of these laws. For me it's not some sneaky Constitutional measure. It's a matter of following the laws that Congress has the clearest authority to pass first: appropriation acts and revenue acts."

My one concern is that if Obama does go forward and just follows the revenue and approriations act that Congress gives him (because he has to break one law and the debt limit is on the shakiest Constitutional grounds and was passed earlier than the appropriations and revenue bills if I'm not mistaken) then the idiots who already think he's a tyrant are going to go nuts, which is something we want to avoid.

11 comments:

  1. I'd like to point out to DeLong that the Congress has the sole power under Art. I to borrow money. Nothing in the 14th Amendment changes that and that is exactly why the Obama administration shied away pretty fast from Clinton's not terribly bright claim.

    http://www.usconstitution.net/const.html#A1Sec8

    This is one of the more bright line pieces of the Constitution in fact.

    Now, whether it is appropriate financially or economically for the Congress to create the debt limit mechanism is another matter entirely. But the President has no constitutional role beyond that of execution and veto; he has no power to raise the debt limit because only the Congress can borrow money on the credit of the United States. Plain and simple.

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  2. Gary you're missing the point - you can't simultaneously execute an appropriation bill, a revenue bill, and a debt limit. Brad points out the real role of the 14th amendment here - you can't default on debts, which was the one way that Obama could get by without violating appropriations, revenue, and debt limit laws.

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  3. That is not the role of the 14th Amendment; sorry, but wrong.

    I don't go to Brad DeLong for constitutional scholarship and no one else should either. Now Laurence Tribe* on the other, has it right:

    http://www.nytimes.com/2011/07/08/opinion/08tribe.html

    http://www.dorfonlaw.org/2011/07/guest-post-on-debt-ceiling-by-laurence.html

    So no, Brad doesn't point out the "real role" of the 14th Amendment.

    *If you've never heard of him, he is one of the most gifted constitutional scholars of the last hundred years (whether I agree with him on every point or not).

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  4. "...you can't simultaneously execute an appropriation bill, a revenue bill, and a debt limit."

    It is a tough pickle for the executive branch, but it is has no power to remedy the situation on its own; that power lies almost exclusively with the Congress. There's a reason why that is the case; the framers expected these decisions to be made by the Congress and until that time the executive branch has to live within the constitutional powers afforded to it. Plain and simple. Obama cannot constitutionally raise the debt limit; so he is bound to make the payments that he can make under current revenues and write IOUs on the rest. That's just the way that it is. If Obama does anything else it will be far more destructive of the constitutional and the good credit of the United States than simply waiting for Congress to make a decision.

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  5. Meant to put this here:

    Now, under modern non-delegation doctrine jurisprudence if the Congress wanted to delegate that power to the executive branch (so long as there is the "articulable principle" and all that stuff) I guess it could, but the Congress has chosen not to do that, so Obama is stuck with the choices that the Congress has made so far. Like Tribe points out the Constitution doesn't solve every problem, and as I point out, often the Constitution isn't going to give you the answer you want - you have to live within its bounds whatever the case.

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  6. re: "It is a tough pickle for the executive branch, but it is has no power to remedy the situation on its own; that power lies almost exclusively with the Congress. There's a reason why that is the case; the framers expected these decisions to be made by the Congress and until that time the executive branch has to live within the constitutional powers afforded to it. Plain and simple."

    And the whole problem is that Congress is passing conflicting legislation. Once we hit August 2nd or whatever the actual date ends up being (the 2nd was a forecast), simply by sitting in the office Obama is violating the will of Congress. It doesn't matter what he does.

    re: "Obama cannot constitutionally raise the debt limit; so he is bound to make the payments that he can make under current revenues and write IOUs on the rest. That's just the way that it is."

    You do realize "write IOUs" is equivalent to "raising the debt", don't you???? And if he doesn't write IOUs he's in violation of the appropriation laws (which Congress ALSO has the exclusive authority to pass).


    This is not a new phenomenon. Congress occassionally passes conflicting legislation - it's inevitable. The task is to figure out what legislation takes precedent to reconcile the conflicting legislation. Obama is not guilty of usurping Congress if he does that. Unfortunately, a lot of people are going to act as if he is.

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  7. Well, more to the point, what I mean by IOU is that the treasury starts picking and choosing what it will fund - as has been suggested by a lot of people, they'll probably start with payments to the states.

    "The task is to figure out what legislation takes precedent to reconcile the conflicting legislation."

    No, that is not the task. That is not within the President's power and never has been (unless think that the executive branch has some sort of extra-constitutional power, a theory I reject); he doesn't get to pick and choose on the matter except to say the treasury starts to figure out what they are going to cover in light of the constraints the Congress has put on spending.

    He has no discretion on the matter except the discretion to figure out what he wants to spend on with the current money available.

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  8. re: "Well, more to the point, what I mean by IOU is that the treasury starts picking and choosing what it will fund - as has been suggested by a lot of people, they'll probably start with payments to the states."

    How is this not violating a power that the Constitution exclusively grants to Congress Gary. The president doesn't get to choose what he does and doesn't pay out. As you said - he can only execute or veto.

    The problem is in finding the constitutionally consistent route to reconciling conflicting legislation.

    re: "unless think that the executive branch has some sort of extra-constitutional power, a theory I reject"

    Apparently you don't reject this Gary. You suggested that the president should selectively disregard appropriations bills.

    The executive branch reconciles conflicting laws and clarifies confusing laws all the time. These sorts of decisions are precisely what executing the laws of Congress entails.

    Something has to give here - he has to break some law.

    The appropriations laws were passed more recently than the debt ceiling (February 2010 for debt ceiling - September 2010 through April 2010 for various appropriations acts). Executing the laws of Congress means proceeding as if the appropriations acts supersede prior law.

    re: "He has no discretion on the matter except the discretion to figure out what he wants to spend on with the current money available."

    Gary, you are advocating he disregard an appropriations act. Don't quote Article 1 section 8 to me if you're going to make assertions like this.

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  9. Daniel is right on this. Current law and interpretation prevents the president from making decisions on what to spend the money on. See nixon and impoundment. Merely prioritizing spending is just as unconstitutional as issuing debt without authorization, or for that matter skipping payments on the debt.

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  10. argosyjones,

    No, I am right, and Daniel is wrong.

    Daniel,

    I'm sorry, but no. The time at which a law or bill was passed has no bearing on the matter at all (unless the bill specifically or implicitly overturns prior law - which is not the case here).

    "You suggested that the president should selectively disregard appropriations bills."

    No, I suggested no such thing; I said rather plainly that for now he has to decide what to fund and what not to fund; that does not mean that he is disregarding appropriations bills he is simply say we do not have the money for X right now and when we get the money we'll pay you. That's very different from say a line-item veto or some such. You're comparing to the latter essentially, which is not what is going on. These are quite different matters; they may seem the same, but they aren't.

    "The executive branch reconciles conflicting laws and clarifies confusing laws all the time."

    No, as a technical matter they don't do this; they interpret the law as best as they can (that's the whole point of the "intelligible principle" deal), but they don't "reconcile" or "clarify" laws; that is outside the power of the Executive branch (indeed, what you seem to be suggesting here is that the Executive branch has some sort of judicial role in constitutional interpretation - at least that is the way I understand your point - and that is just not the case).

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  11. Daniel is right on this. Present law and design inhibits the chief executive from creating selections on what to cash. See nixon and impoundment. Merely showing priority for paying is just as unconstitutional as publishing debts without endorsement, or for that topic missing bills on the debts.seo博客英文seo

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